- A joint venture is not a separate legal entity. It is simply an agreement between two more parties that they will work together.
- A joint venture is defined as an association of persons, natural or juristic, who agree to engage in a common undertaking by combining selected property, expertise or resources without forming a partnership or corporation.
- Unlike a partnership, each participant in a JV is only responsible for their own liabilities (and is not jointly responsible for all the debts as in a partnership).
- JVs are typically used where the parties concerned intend to pursue a single venture only. Outside of the JV the parties may well compete against each other.
- Unlike a company, no formalities are required in setting up a JV. It would, however, be most unwise not to specify what contribution each party is going to make (e.g. expertise, equipment or even a financial contribution) and how the benefits are going to be distributed.
- This policy covers the Insured Person while they are working in the JV on behalf of the Insured company.
Directors and Officers Liability